{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/260/10/#55-implementation-guidance-and-illustrations","source":"FASB Accounting Standards Codification, Basic View","usage":"Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective.","topic":"260","topic_title":"Earnings Per Share","subtopic":"260-10","subtopic_title":"Overall","section":{"number":"55","label":"55 Implementation Guidance and Illustrations","anchor":"55-implementation-guidance-and-illustrations","is_sec":false,"groups":[{"block":null,"heading":"Implementation Guidance","paragraphs":[{"citation":"260-10-55-1","para":"55-1","html":"
This Section, which is an integral part of the requirements of this Subtopic, provides general guidance to be used in the computation of earnings per share (EPS).
","snippet":"This Section, which is an integral part of the requirements of this Subtopic, provides general guidance to be used in the computation of earnings per share (EPS).","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ccd92093b4e0c5a8d53e8c8aa0643c735302e589f7672a308bcde705d5584a5a","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-2","para":"55-2","html":"
The weighted-average number of shares is an arithmetical mean average of shares outstanding and assumed to be outstanding for EPS computations. The most precise average would be the sum of the shares determined on a daily basis divided by the number of days in the period. Less-precise averaging methods may be used, however, as long as they produce reasonable results. Methods that introduce artificial weighting, such as the Rule of 78 method, are not acceptable for computing a weighted-average number of shares for EPS computations.
","snippet":"The weighted-average number of shares is an arithmetical mean average of shares outstanding and assumed to be outstanding for EPS computations. The most precise average would be the sum of the shares determined on a dail…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:208944732c7248d3739efaf0362b4cd952e033760d3846f12befd10a638f17f8","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-3","para":"55-3","html":"
The number of incremental shares included in quarterly diluted EPS shall be computed using the average market prices during the three months included in the reporting period. For year-to-date diluted EPS, the number of incremental shares to be included in the denominator shall be determined by computing a year-to-date weighted average of the number of incremental shares included in each quarterly diluted EPS computation. Example 1 (see paragraph 260-10-55-38) provides an illustration of that provision.
","snippet":"The number of incremental shares included in quarterly diluted EPS shall be computed using the average market prices during the three months included in the reporting period. For year-to-date diluted EPS, the number of i…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:67c73f48b0dcbbc7ad6d220992f85624bc2e5375757bbe0cb626ad0f7898994b","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-3A","para":"55-3A","html":"
Computation of year-to-date diluted EPS when an entity has a year-to-date loss from continuing operations including one or more quarters with income from continuing operations and when in-the-money options or warrants were not included in one or more quarterly diluted EPS computations because there was a loss from continuing operations in those quarters is as follows. In computing year-to-date diluted EPS, year-to-date income (or loss) from continuing operations shall be the basis for determining whether or not dilutive potential common shares not included in one or more quarterly computations of diluted EPS shall be included in the year-to-date computation.
Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:
260-10-65-5Computation of year-to-date diluted EPS when an entity has a loss from continuing operations in one or more quarters (regardless of whether the entity has a year-to-date income or loss from continuing operations) and when in-the-money options or warrants were not included in one or more quarterly diluted EPS computations because the effect was antidilutive (for example, there was a loss from continuing operations in those quarters) is as follows. In computing year-to-date diluted EPS, year-to-date income (or loss) from continuing operations shall be the basis for determining whether or not dilutive potential common shares not included in one or more quarterly computations of diluted EPS shall be included in the year-to-date computation on a weighted-average basis.
","snippet":"Computation of year-to-date diluted EPS when an entity has a year-to-date loss from continuing operations including one or more quarters with income from continuing operations and when in-the-money options or warrants we…","pending":true,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8fc88bbce9b5423224ec600fd2d1fc1aeb35d4bff4c06e0f129dbfd0ca944835","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-3B","para":"55-3B","html":"
Therefore:
  1. a
    When there is a year-to-date loss, potential common shares should never be included in the computation of diluted EPS, because to do so would be antidilutive.
  2. b
    When there is year-to-date income, if in-the-money options or warrants were excluded from one or more quarterly diluted EPS computations because the effect was antidilutive (there was a loss from continuing operations in those periods), then those options or warrants should be included in the diluted EPS denominator (on a weighted-average basis) in the year-to-date computation as long as the effect is not antidilutive. Similarly, contingent shares that were excluded from a quarterly computation solely because there was a loss from continuing operations should be included in the year-to-date computation unless the effect is antidilutive.
Example 12 (see paragraph 260-10-55-85) illustrates this guidance.
Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:
260-10-65-5Paragraph superseded by Accounting Standards Update No. 2025-12.
","snippet":"Therefore:\n(a) When there is a year-to-date loss, potential common shares should never be included in the computation of diluted EPS, because to do so would be antidilutive.\n(b) When there is year-to-date income, if in-t…","pending":true,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:962e25bde3100af485928df428dd563698d27a8bb26d38947dda48c1de032bcd","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-3C","para":"55-3C","html":"
Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:
260-10-65-5If in-the-money options or warrants were excluded from one or more quarterly diluted EPS computations because the effect was antidilutive, then those options or warrants should be included in the diluted EPS denominator (on a weighted-average basis) in the year-to-date computation as long as the effect is dilutive. Similarly, contingent shares that were excluded from a quarterly computation because the effect was antidilutive to that quarter should be included in the year-to-date computation if the effect is dilutive to the year-to-date period. Example 12 (see paragraph 260-10-55-85) illustrates this guidance.
","snippet":"Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:260-10-65-5If in-the-money options or warrants were excluded from one or more quarterly diluted EPS computations because the effect was anti…","pending":true,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ac29c351255b2d12c61962abcbe551e64d482f2c706e5fc78d54a601be088f87","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-4","para":"55-4","html":"
The average market price of common stock shall represent a meaningful average. Theoretically, every market transaction for an entity's common stock could be included in determining the average market price. As a practical matter, however, a simple average of weekly or monthly prices usually will be adequate.
","snippet":"The average market price of common stock shall represent a meaningful average. Theoretically, every market transaction for an entity's common stock could be included in determining the average market price. As a practica…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:dd70d3a1f10958e6194684487c88ece3a8bb83dff2f199276790880a43b3a4c3","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-5","para":"55-5","html":"
Generally, closing market prices are adequate for use in computing the average market price. When prices fluctuate widely, however, an average of the high and low prices for the period that the price represents usually would produce a more representative price. The method used to compute the average market price shall be used consistently unless it is no longer representative because of changed conditions. For example, an entity that uses closing market prices to compute the average market price for several years of relatively stable market prices might need to change to an average of high and low prices if prices start fluctuating greatly and the closing market prices no longer produce a representative average market price.
","snippet":"Generally, closing market prices are adequate for use in computing the average market price. When prices fluctuate widely, however, an average of the high and low prices for the period that the price represents usually w…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:761c9e53ab0193106823f31231d19f46162f23ff47b3a220e3d0ce115913b3c7","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-6","para":"55-6","html":"
Options or warrants to purchase convertible securities shall be assumed to be exercised to purchase the convertible security whenever the average prices of both the convertible security and the common stock obtainable upon conversion are above the exercise price of the options or warrants. However, exercise shall not be assumed unless conversion of similar outstanding convertible securities, if any, also is assumed. The treasury stock method shall be applied to determine the incremental number of convertible securities that are assumed to be issued and immediately converted into common stock. Interest or dividends shall not be imputed for the incremental convertible securities because any imputed amount would be reversed by the if-converted adjustments for assumed conversions.
","snippet":"Options or warrants to purchase convertible securities shall be assumed to be exercised to purchase the convertible security whenever the average prices of both the convertible security and the common stock obtainable up…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ed5e22afce3460e740f52120bfedfc6ae82e0dffef89a9168455de946cf53e29","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-7","para":"55-7","html":"
Paragraphs
260-10-55-9 through 55-11
provide guidance on how certain options and warrants should be included in the computation of diluted EPS. Exercise of the potential common shares discussed in those paragraphs shall not be reflected in diluted EPS unless the effect is dilutive. Those potential common shares will have a dilutive effect if either of the following conditions is met:
  1. a
    The average market price of the related common stock for the period exceeds the exercise price.
  2. b
    The security to be tendered is selling at a price below that at which it may be tendered under the option or warrant agreement and the resulting discount is sufficient to establish an effective exercise price below the market price of the common stock obtainable upon exercise.
","snippet":"Paragraphs 260-10-55-9 through 55-11 provide guidance on how certain options and warrants should be included in the computation of diluted EPS. Exercise of the potential common shares discussed in those paragraphs shall …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:76e0effac1113dbf2dc32dfd250198dac48b81d633409ef5532b9504ae9b9e30","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-8","para":"55-8","html":"
When several conversion alternatives exist, the computation shall give effect to the alternative that is most advantageous to the holder of the convertible security. Similar treatment shall be given to preferred stock that has similar provisions or to other securities that have conversion options that permit the investor to pay cash for a more favorable conversion rate.
","snippet":"When several conversion alternatives exist, the computation shall give effect to the alternative that is most advantageous to the holder of the convertible security. Similar treatment shall be given to preferred stock th…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:bc02e52281380d681606973ecfc299640114944cf526846cfee599468ff9b9c1","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-9","para":"55-9","html":"
Options or warrants may permit or require the tendering of debt or other securities of the issuer (or its parent or its subsidiary) in payment of all or a portion of the exercise price. In computing diluted EPS, those options or warrants shall be assumed to be exercised and the debt or other securities shall be assumed to be tendered. If tendering cash would be more advantageous to the option holder or warrant holder and the contract permits tendering cash, the treasury stock method shall be applied. Interest (net of tax) on any debt assumed to be tendered shall be added back as an adjustment to the numerator. The numerator also shall be adjusted for any nondiscretionary adjustments based on income (net of tax). The treasury stock method shall be applied for proceeds assumed to be received in cash.
","snippet":"Options or warrants may permit or require the tendering of debt or other securities of the issuer (or its parent or its subsidiary) in payment of all or a portion of the exercise price. In computing diluted EPS, those op…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c9db257e8a77990dbc1151d31d28ba19db3b58aa45b69a671326c5e53478a642","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-10","para":"55-10","html":"
The underlying terms of certain options or warrants may require that the proceeds received from the exercise of those securities be applied to retire debt or other securities of the issuer (or its parent or its subsidiary). In computing diluted EPS, those options or warrants shall be assumed to be exercised and the proceeds applied to purchase the debt at its average market price rather than to purchase common stock under the treasury stock method. The treasury stock method shall be applied, however, for excess proceeds received from the assumed exercise. Interest, net of tax, on any debt assumed to be purchased shall be added back as an adjustment to the numerator. The numerator also shall be adjusted for any nondiscretionary adjustments based on income (net of tax).
","snippet":"The underlying terms of certain options or warrants may require that the proceeds received from the exercise of those securities be applied to retire debt or other securities of the issuer (or its parent or its subsidiar…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:868892f41c6ce1bd86726bda3effe2a8c6cf8150b95719f0a7e71f2ef24c5944","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-11","para":"55-11","html":"
Convertible securities that permit or require the payment of cash by the holder of the security at conversion are considered the equivalent of warrants. In computing diluted EPS, the proceeds assumed to be received shall be assumed to be applied to purchase common stock under the treasury stock method and the convertible security shall be assumed to be converted under the if-converted method. See Example 11 (paragraph 260-10-55-78) for guidance on the effects of contingently convertible instruments on diluted EPS.
","snippet":"Convertible securities that permit or require the payment of cash by the holder of the security at conversion are considered the equivalent of warrants. In computing diluted EPS, the proceeds assumed to be received shall…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c95a54025a64c21f0cb4add887e247955825e1e010e16a207ff215100da034a8","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-12","para":"55-12","html":"
If the number of common shares outstanding increases as a result of a stock dividend or stock split (see Subtopic 505-20) or decreases as a result of a reverse stock split, the computations of basic and diluted EPS shall be adjusted retroactively for all periods presented to reflect that change in capital structure. If changes in common stock resulting from stock dividends, stock splits, or reverse stock splits occur after the close of the period but before the financial statements are issued or are available to be issued (as discussed in Section 855-10-25), the per-share computations for those and any prior-period financial statements presented shall be based on the new number of shares. If per-share computations reflect such changes in the number of shares, that fact shall be disclosed.
","snippet":"If the number of common shares outstanding increases as a result of a stock dividend or stock split (see Subtopic 505-20) or decreases as a result of a reverse stock split, the computations of basic and diluted EPS shall…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3f1c88efabce7f3896ccd6d51a8792542a76e04a0fc0b5d89de1e420cb35eb6d","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-13","para":"55-13","html":"
A rights issue whose exercise price at issuance is less than the fair value of the stock contains a bonus element that is somewhat similar to a stock dividend. If a rights issue contains a bonus element and the rights issue is offered to all existing stockholders, basic and diluted EPS shall be adjusted retroactively for the bonus element for all periods presented. If the ability to exercise the rights issue is contingent on some event other than the passage of time, the provisions of this paragraph shall not be applicable until that contingency is resolved.
","snippet":"A rights issue whose exercise price at issuance is less than the fair value of the stock contains a bonus element that is somewhat similar to a stock dividend. If a rights issue contains a bonus element and the rights is…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:857f6ad12790ba77ead7bd7ce73cc87640324f98063e365dec9ae0d6335c21d7","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-14","para":"55-14","html":"
The number of common shares used in computing basic and diluted EPS for all periods prior to the rights issue shall be the number of common shares outstanding immediately prior to the issue multiplied by the following factor: (fair value per share immediately prior to the exercise of the rights)/(theoretical ex-rights fair value per share). Theoretical ex-rights fair value per share shall be computed by adding the aggregate fair value of the shares immediately prior to the exercise of the rights to the proceeds expected from the exercise of the rights and dividing by the number of shares outstanding after the exercise of the rights. Example 5 (see paragraph 260-10-55-60) illustrates that provision. If the rights themselves are to be publicly traded separately from the shares prior to the exercise date, fair value for the purposes of this computation shall be established at the close of the last day on which the shares are traded together with the rights.
","snippet":"The number of common shares used in computing basic and diluted EPS for all periods prior to the rights issue shall be the number of common shares outstanding immediately prior to the issue multiplied by the following fa…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:434780fab264bb68ee9ca46f95ad9bd2b8248591a812948739990ac3cba32478","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-15","para":"55-15","html":"
If authoritative literature requires that a restatement of the results of operations of a prior period be included in the income statement or summary of earnings, then EPS data given for the prior period or periods shall be restated. The effect of the restatement, expressed in per-share terms, shall be disclosed in the period of restatement.
","snippet":"If authoritative literature requires that a restatement of the results of operations of a prior period be included in the income statement or summary of earnings, then EPS data given for the prior period or periods shall…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4bede06523cd9491a384e93fbf6e9ee75060d7667288b6264e9e9378945e2f76","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-16","para":"55-16","html":"
Restated EPS data shall be computed as if the restated income or loss had been reported originally in the prior period or periods. Thus, it is possible that common stock assumed to be issued upon exercise, conversion, or issuance of potential common shares in accordance with the provisions of this Subtopic may not be included in the computation of restated EPS amounts. That is, retroactive restatement of income from continuing operations could cause potential common shares originally determined to be dilutive to become antidilutive pursuant to the control number provision in paragraph 260-10-45-18. The reverse also is true. Retroactive restatement also may cause the numerator of the EPS computation to change by an amount that differs from the amount of the retroactive adjustment.
","snippet":"Restated EPS data shall be computed as if the restated income or loss had been reported originally in the prior period or periods. Thus, it is possible that common stock assumed to be issued upon exercise, conversion, or…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:96a8ab3e0f1d568df862f1545b1d0580f2e08f86b0705b5b083848badbca8491","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-16A","para":"55-16A","html":"
See paragraph 260-10-55-111 for guidance on the presentation of prior-period earnings per unit for entities within the scope of the Master Limited Partnerships Subsections that retrospectively adjust their financial statements and financial information for prior periods as a result of a dropdown transaction accounted for under the Transactions Between Entities Under Common Control Subsections of Subtopic 805-50.
","snippet":"See paragraph 260-10-55-111 for guidance on the presentation of prior-period earnings per unit for entities within the scope of the Master Limited Partnerships Subsections that retrospectively adjust their financial stat…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2f31ebfe0ead417ccbb3e39ac65a5c097363b50bb7288e260bba2df6c27b7106","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-17","para":"55-17","html":"
When common shares are issued to acquire a business in a business combination, the computations of EPS shall recognize the existence of the new shares only from the acquisition date. In reorganizations, EPS computations shall be based on analysis of the particular transaction and the provisions of this Subtopic.
","snippet":"When common shares are issued to acquire a business in a business combination, the computations of EPS shall recognize the existence of the new shares only from the acquisition date. In reorganizations, EPS computations …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:39ec27e081ccdb34082935c9d20ce7d7389d3a547144214ff5d4980cfb18d23c","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-18","para":"55-18","html":"
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The effect on consolidated EPS of options, warrants, and convertible securities issued by a subsidiary depends on whether the securities issued by the subsidiary enable their holders to obtain common stock of the subsidiary or common stock of the parent entity. The following general guidelines shall be used for computing consolidated diluted EPS by entities with subsidiaries that have issued common stock or potential common shares to parties other than the parent entity
  1. a
    Securities issued by a subsidiary that enable their holders to obtain the subsidiary's common stock shall be included in computing the subsidiary's EPS data. Those per-share earnings of the subsidiary shall then be included in the consolidated EPS computations based on the consolidated group's holding of the subsidiary's securities. Example 7 (see paragraph 260-10-55-64) illustrates that provision.
  2. b
    Securities of a subsidiary that are convertible into its parent entity's common stock shall be considered among the potential common shares of the parent entity for the purpose of computing consolidated diluted EPS. Likewise, a subsidiary's options or warrants to purchase common stock of the parent entity shall be considered among the potential common shares of the parent entity in computing consolidated diluted EPS. Example 7 (see paragraph 260-10-55-64) illustrates that provision.
","snippet":"The effect on consolidated EPS of options, warrants, and convertible securities issued by a subsidiary depends on whether the securities issued by the subsidiary enable their holders to obtain common stock of the subsidi…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f951f32ba08621683b6b474b45390545bc334ef2ef723b0c6608a461afe6958e","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-21","para":"55-21","html":"
The preceding provisions also apply to investments in common stock of corporate joint ventures and investee companies accounted for under the equity method.
","snippet":"The preceding provisions also apply to investments in common stock of corporate joint ventures and investee companies accounted for under the equity method.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:00a31958d9b95af6437beb7a4e0407762b20f8e28a25a6c72f4aea061a9d996c","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-22","para":"55-22","html":"
The if-converted method shall be used in determining the EPS impact of securities issued by a parent entity that are convertible into common stock of a subsidiary or an investee entity accounted for under the equity method. That is, the securities shall be assumed to be converted and the numerator (income available to common stockholders) adjusted as necessary in accordance with the provisions in paragraph 260-10-45-40(a) through (b). In addition to those adjustments, the numerator shall be adjusted appropriately for any change in the income recorded by the parent (such as dividend income or equity method income) due to the increase in the number of common shares of the subsidiary or equity method investee outstanding as a result of the assumed conversion. The denominator of the diluted EPS computation would not be affected because the number of shares of parent entity common stock outstanding would not change upon assumed conversion.
","snippet":"The if-converted method shall be used in determining the EPS impact of securities issued by a parent entity that are convertible into common stock of a subsidiary or an investee entity accounted for under the equity meth…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:515a426ab2aaff6dacbd61c795f89d543f48af8e46aba566ac1096a919e319b0","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-23","para":"55-23","html":"
If an entity has common shares issued in a partially paid form (permitted in some countries) and those shares are entitled to dividends in proportion to the amount paid, the common-share equivalent of those partially paid shares shall be included in the computation of basic EPS to the extent that they were entitled to participate in dividends. Partially paid stock subscriptions that do not share in dividends until fully paid are considered the equivalent of warrants and shall be included in diluted EPS by use of the treasury stock method. That is, the unpaid balance shall be assumed to be proceeds used to purchase stock under the treasury stock method. The number of shares included in diluted EPS shall be the difference between the number of shares subscribed and the number of shares assumed to be purchased.
","snippet":"If an entity has common shares issued in a partially paid form (permitted in some countries) and those shares are entitled to dividends in proportion to the amount paid, the common-share equivalent of those partially pai…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ead1ed8e31b3b5cbdff2f7a8c0613b37fcf3c30ee8048a2ac6de771d183502b3","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-23A","para":"55-23A","html":"
Paragraphs
260-10-55-24 through 55-31
provide additional guidance on the requirements in paragraph 260-10-45-65 related to the allocation of undistributed earnings to participating securities.
","snippet":"Paragraphs 260-10-55-24 through 55-31 provide additional guidance on the requirements in paragraph 260-10-45-65 related to the allocation of undistributed earnings to participating securities.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:bbce54454d7080276ee3cd6620c01cfd202ba0d04003695264d46f0f50c7e5be","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-24","para":"55-24","html":"
In all of the following circumstances, the participation rights of the securities may be required to be disclosed in accordance with the provisions of Subtopic 505-10, regardless of whether undistributed earnings are allocated to the participating security.
","snippet":"In all of the following circumstances, the participation rights of the securities may be required to be disclosed in accordance with the provisions of Subtopic 505-10, regardless of whether undistributed earnings are all…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:62d0e406be20ecac0ff38d860d77d44652a85416498ff77cf65ce342e89628a2","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-25","para":"55-25","html":"
If a participating security provides the holder with the ability to participate in all dividends declared with the holders of common stock on a one-to-one per-share basis, then the undistributed earnings should be allocated between the common stock and the participating security on a one-to-one per-share basis.
","snippet":"If a participating security provides the holder with the ability to participate in all dividends declared with the holders of common stock on a one-to-one per-share basis, then the undistributed earnings should be alloca…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:78e644d9f36b3cb40f561afa06411e3f6b5aaae23692a4831b95e77ddd803665","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-26","para":"55-26","html":"
If a participating security provides the holder with the ability to participate with the holders of common stock in dividends declared contingent upon the occurrence of a specified event, the occurrence of which is subject to management discretion or is not objectively determinable (for example, liquidation of the entity or management determination of an extraordinary dividend), then the terms of the participating security do not specify objectively determinable, nondiscretionary participation rights; therefore, undistributed earnings would not be allocated to the participating security.
","snippet":"If a participating security provides the holder with the ability to participate with the holders of common stock in dividends declared contingent upon the occurrence of a specified event, the occurrence of which is subje…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3d5638db82ad6ee6aa3aa313496bc20d968bb9e2c0de6ea3616d4e1dcccea657","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-27","para":"55-27","html":"
If a participating security provides the holder with the ability to participate with the holders of common stock in earnings for a period in which a specified event occurs, regardless of whether a dividend is paid during the period (for example, achievement of a target market price of a security or achievement of a certain earnings level), then undistributed earnings would be allocated to common stock and the participating security based on the assumption that all of the earnings for the period are distributed. Undistributed earnings would be allocated to the participating security if the contingent condition would have been satisfied at the reporting date, irrespective of whether an actual distribution was made for the period.
","snippet":"If a participating security provides the holder with the ability to participate with the holders of common stock in earnings for a period in which a specified event occurs, regardless of whether a dividend is paid during…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:247c13a0a43990a6c866f62f3d86bd48f5be6f5a352318d84260dd0518a2dea7","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-28","para":"55-28","html":"
If a participating security provides the holder with the ability to participate in extraordinary dividends and the classification of dividends as extraordinary is predetermined by a formula, for example, any dividend per common share in excess of 5 percent of the current market price of the stock is defined as extraordinary, then undistributed earnings would be allocated to common stock and the participating security based on the assumption that all of the earnings for the period are distributed. If earnings for a given period exceed the specified threshold above which the participating security would participate (that is, earnings for the period are in excess of 5 percent of the current market price of the stock), undistributed earnings would be allocated to the participating security according to its terms.
","snippet":"If a participating security provides the holder with the ability to participate in extraordinary dividends and the classification of dividends as extraordinary is predetermined by a formula, for example, any dividend per…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0645fd1341a520f65cdcd7d6fe27599e0a30c6cbc53ba547de1b18f79d36eb09","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-29","para":"55-29","html":"
If a participating security provides the holder with the ability to participate in extraordinary dividends and the classification of dividends as extraordinary is within the sole discretion of the board of directors, then undistributed earnings would be allocated only to common stock. Since the classification of dividends as extraordinary is within the sole discretion of the board of directors, undistributed earnings would not be allocated to the participating security as the participation in the undistributed earnings would not be objectively determinable.
","snippet":"If a participating security provides the holder with the ability to participate in extraordinary dividends and the classification of dividends as extraordinary is within the sole discretion of the board of directors, the…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:579927cac2a09f82c5660b698dfcd70aef8cf9b4c9722c985f48ce38a47c0828","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-30","para":"55-30","html":"
If a participating security provides the holder with the ability to participate in all dividends up to a specified threshold (for example, the security participates in dividends per common share up to 5 percent of the current market price of the stock), then undistributed earnings would be allocated to common stock and the participating security based on the assumption that all of the earnings for the period are distributed. In this example, undistributed earnings would be allocated to common stock and to the participating security up to 5 percent of the current market price of the common stock, as the amount of the threshold for participation by the participating security is objectively determinable. The remaining undistributed earnings for the period would be allocated to common stock.
","snippet":"If a participating security provides the holder with the ability to participate in all dividends up to a specified threshold (for example, the security participates in dividends per common share up to 5 percent of the cu…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7e8929502e6b47dea61d6c3fff4d59d0e6a5dfde298a0d7c74d08ffdeb1f3d4a","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-31","para":"55-31","html":"
See Example 9 (paragraph 260-10-55-71) for an illustration of this guidance.
","snippet":"See Example 9 (paragraph 260-10-55-71) for an illustration of this guidance.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f3f1998fe0316f6b8211c4e0aff16690010c0342030738cd586f9f3d1392f848","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-32","para":"55-32","html":"
Adjustments shall be made to the numerator for contracts that are asset or liability classified, in accordance with Section 815-40-25, but for which the potential common shares are included in the denominator in accordance with the guidance in paragraph 260-10-45-45. For purposes of computing diluted EPS, the adjustments to the numerator are only permitted for instruments for which the effect on net income (the numerator) is different depending on whether the instrument is accounted for as an equity instrument or as an asset or liability (for example, those that are within the scope of Subtopics 480-10 and 815-40).
","snippet":"Adjustments shall be made to the numerator for contracts that are asset or liability classified, in accordance with Section 815-40-25, but for which the potential common shares are included in the denominator in accordan…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1be1b998adab3ec60937dfb5df297cd4d3a256b0677588e47f8d54409d1141c0","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-33","para":"55-33","html":"
The references in paragraphs 260-10-45-30 and 260-10-45-45 for share-based payment arrangements that are payable in common stock or in cash at the election of either the entity or the grantee refer to using the guidance in paragraph 260-10-45-45Afor purposes of determining whether shares issuable in accordance with such plans are included in the denominator for purposes of computing diluted EPS amounts. Accordingly, the numerator is not adjusted in those circumstances. Paragraph 260-10-55-36A illustrates these requirements.
","snippet":"The references in paragraphs 260-10-45-30 and 260-10-45-45 for share-based payment arrangements that are payable in common stock or in cash at the election of either the entity or the grantee refer to using the guidance …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:65252d3e5f2dfb241317e89fa93770bece0dfecb42b19e5b0baa4a3697f7dce9","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-34","para":"55-34","html":"
Year-to-date diluted EPS calculations may require an adjustment to the numerator in certain circumstances. For example, for contracts that are share settled for EPS purposes, the numerator adjustment is equal to the earnings effect of the change in the fair value of the asset or liability recorded pursuant to Section 815-40-35 during the year-to-date period. In that example, the number of incremental shares included in the denominator should be determined in accordance with the guidance in paragraph 260-10-55-3.
","snippet":"Year-to-date diluted EPS calculations may require an adjustment to the numerator in certain circumstances. For example, for contracts that are share settled for EPS purposes, the numerator adjustment is equal to the earn…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:bc380e0fabf99938af21b3e620f1531a80d9456d753e8b54af779de7c9c51719","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-35","para":"55-35","html":"
Paragraph not used.
","snippet":"Paragraph not used.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c441c2d95c7843e721d107fe531b30356b5a60d10aee3d230869c8769c538f14","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-36","para":"55-36","html":"
Paragraph superseded by Accounting Standards Update No. 2020-06.
","snippet":"Paragraph superseded by Accounting Standards Update No. 2020-06.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5209abd18e77373649bcf51662f3e02440b22068d82e8c0a1a2a14cc7225f03b","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-36A","para":"55-36A","html":"
The following table illustrates the guidance in paragraphs
260-10-45-45 through 45-46
and
260-10-55-32 through 55-34
for the effects of contracts that may be settled in stock or cash on the computation of diluted EPS.
","snippet":"The following table illustrates the guidance in paragraphs 260-10-45-45 through 45-46 and 260-10-55-32 through 55-34 for the effects of contracts that may be settled in stock or cash on the computation of diluted EPS.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:06f5e52415d82d1701c4c67b2d60220156042e60febcf98951566f4c3fa231bb","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d197fefb0f4c3d25013aa8fd19b38e702d3872d6e7684a5656116343951f1beb","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"block":null,"heading":"Illustrations","paragraphs":[{"citation":"260-10-55-37","para":"55-37","html":"
The following Examples illustrate this Subtopic's application to entities with complex capital structures. Certain assumptions have been made to simplify the computations and focus on the issue at hand in each Example.
","snippet":"The following Examples illustrate this Subtopic's application to entities with complex capital structures. Certain assumptions have been made to simplify the computations and focus on the issue at hand in each Example.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9beee8617992b4dc4172d802e0e9f084c7c42684e0889d987642daac08ac2335","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-38","para":"55-38","html":"
This Example illustrates the quarterly and annual computations of basic and diluted EPS in the year 20X1 for Entity A, which has a complex capital structure. The control number used in this Example (and in Example 2) is income from continuing operations. Paragraph 260-10-55-49 illustrates the presentation of basic and diluted EPS on the face of the income statement. The facts assumed are as follows:
  1. a
    Average market price of common stock. The average market prices of common stock for the calendar-year 20X1 were as follows.
    • First quarter $59 Second quarter $70 Third quarter $72 Fourth quarter $72
  2. b
    The average market price of common stock from July 1 to September 1, 20X1 was $71.
  3. c
    Common stock. The number of shares of common stock outstanding at the beginning of 20X1 was 3,300,000. On March 1, 20X1, 100,000 shares of common stock were issued for cash.
  4. d
    Convertible debentures. In the last quarter of 20X0, 4 percent convertible debentures with a principal amount of $10,000,000 due in 20 years were sold for cash at $1,000 (par). Interest is payable semiannually on November 1 and May 1. Each $1,000 debenture is convertible into 20 shares of common stock. No debentures were converted in 20X0. The entire issue was converted on April 1, 20X1, because the issue was called by Entity A.
  5. e
    Convertible preferred stock. In the second quarter of 20X0, 600,000 shares of convertible preferred stock were issued for assets in a purchase transaction. The quarterly dividend on each share of that convertible preferred stock is $0.05, payable at the end of the quarter. Each share is convertible into one share of common stock. Holders of 500,000 shares of that convertible preferred stock converted their preferred stock into common stock on June 1, 20X1.
  6. f
    Warrants. Warrants to buy 500,000 shares of common stock at $60 per share for a period of 5 years were issued on January 1, 20X1. All outstanding warrants were exercised on September 1, 20X1.
  7. g
    Options. Options to buy 1,000,000 shares of common stock at $85 per share for a period of 10 years were issued on July 1, 20X1. No options were exercised during 20X1 because the exercise price of the options exceeded the market price of the common stock.
  8. h
    Tax rate. The tax rate was 40 percent for 20X1.
","snippet":"This Example illustrates the quarterly and annual computations of basic and diluted EPS in the year 20X1 for Entity A, which has a complex capital structure. The control number used in this Example (and in Example 2) is …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:de875397e6a1b4f76420d546932b00bfdb82a44ecb5cd2c30aa001a46b150d83","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-39","para":"55-39","html":"
The following table illustrates the income (loss) from continuing operations.
","snippet":"The following table illustrates the income (loss) from continuing operations.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:62fd6eed128fdc931eced6f58faad1982cbd8c7995c63f6793a36d357306c5f5","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-40","para":"55-40","html":"
The following tables illustrate calculation of basic EPS for the first quarter.
","snippet":"The following tables illustrate calculation of basic EPS for the first quarter.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a6326c202cc89f5427a4c9376bb5ab905c9f022c9bc5f7f1f782824030f59df1","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-41","para":"55-41","html":"
The following table illustrates calculation of diluted EPS for the first quarter.
","snippet":"The following table illustrates calculation of diluted EPS for the first quarter.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a132a7d18f58cd389dc3dd2a10a436380b7302085bb6dd26431578e9081bad32","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-42","para":"55-42","html":"
The following tables illustrate calculation of basic EPS for the second quarter.
","snippet":"The following tables illustrate calculation of basic EPS for the second quarter.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:428d7e55e5a8d50034dd1c9b4106c48ef21f6bb92eb87796783dc670c3293b7e","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-43","para":"55-43","html":"
The following table illustrates calculation of diluted EPS for the second quarter.
","snippet":"The following table illustrates calculation of diluted EPS for the second quarter.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9b76f7a4a98d0a8dece28120df29506c353e4d10d2d7282bb71f9661ccc1033f","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-44","para":"55-44","html":"
The following tables illustrate calculation of basic EPS for the third quarter.
","snippet":"The following tables illustrate calculation of basic EPS for the third quarter.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3f97b3503e866ee620bd189fc818b2080744d0a03db9eff96dbce46955c2e877","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-45","para":"55-45","html":"
The following tables illustrate calculation of diluted EPS for the third quarter.
Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:
260-10-65-5The following tables illustrate calculation of diluted EPS for the third quarter.
","snippet":"The following tables illustrate calculation of diluted EPS for the third quarter.\nNote that the incremental shares from assumed conversions are included in computing the diluted per-share amounts for the discontinued ope…","pending":true,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1bcdc49351ded7df2b045dd203bddb8b814841b154984543bd61f227fa0f0062","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-46","para":"55-46","html":"
The following tables illustrate calculation of basic and diluted EPS for the fourth quarter.
Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:
260-10-65-5The following tables illustrate calculation of basic and diluted EPS for the fourth quarter.
","snippet":"The following tables illustrate calculation of basic and diluted EPS for the fourth quarter.\nNote that the incremental shares from assumed conversions are not included in computing the diluted per-share amounts for net l…","pending":true,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:036785a69fe99cf46f72063b1866703c1e535207c88a5670861bbeadf726de17","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-47","para":"55-47","html":"
The following tables illustrate calculation of basic EPS for the full year 20X1.
","snippet":"The following tables illustrate calculation of basic EPS for the full year 20X1.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:00534ff3678e825c3a57e04a82abddfec8b17df328aa1afb76c4387b2fddba12","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-48","para":"55-48","html":"
The following tables illustrate calculation of diluted EPS for the full year 20X1.
","snippet":"The following tables illustrate calculation of diluted EPS for the full year 20X1.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:91a96a63e872f85764fff36dc880586cb6c0b5b987525a1eff88b44ce7ae0539","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-49","para":"55-49","html":"
The following table illustrates how Entity A might present its EPS data on its income statement. Note that the per-share amount for the discontinued operation is not required to be shown on the face of the income statement.
","snippet":"The following table illustrates how Entity A might present its EPS data on its income statement. Note that the per-share amount for the discontinued operation is not required to be shown on the face of the income stateme…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f680bed39acc951f7f5685ef42963635955176a3968bdb27b84ccc289248d3ef","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-50","para":"55-50","html":"
The following table includes the quarterly and annual EPS data for Entity A. The purpose of this table is to illustrate that the sum of the four quarters' EPS data will not necessarily equal the annual EPS data. This Subtopic does not require disclosure of this information.
","snippet":"The following table includes the quarterly and annual EPS data for Entity A. The purpose of this table is to illustrate that the sum of the four quarters' EPS data will not necessarily equal the annual EPS data. This Sub…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7a4c41aac7abe7815e77b84e5c01f3823bd001c3911825304d55f6ea8c6478f1","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-51","para":"55-51","html":"
This Example illustrates the reconciliation of the numerators and denominators of the basic and diluted EPS computations for income from continuing operations and other related disclosures required by paragraph 260-10-50-1 for Entity A in Example 1. Note that Topic 718 has specific disclosure requirements related to share-based compensation arrangements.
Transition date:(P) June 30, 2027; (N) June 30, 2027Transition guidance:
105-10-65-7
Editor's Note: The pending content for paragraph 260-10-55-51 linked to paragraph 105-10-65-7 will be removed upon transition of paragraph 270-10-65-1.
This Example illustrates the reconciliation of the numerators and denominators of the basic and diluted EPS computations for income from continuing operations and other related disclosures required by paragraph 260-10-50-1 for Entity A in Example 1. This disclosure is required in both interim and annual periods. Note that Topic 718 has specific disclosure requirements related to share-based compensation arrangements.
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1This Example illustrates the reconciliation of the numerators and denominators of the basic and diluted EPS computations for income from continuing operations and other related disclosures required by paragraph 260-10-50-1 for Entity A in Example 1. This disclosure is required in both interim and annual periods. Note that Topic 718 has specific disclosure requirements related to share-based compensation arrangements.
","snippet":"This Example illustrates the reconciliation of the numerators and denominators of the basic and diluted EPS computations for income from continuing operations and other related disclosures required by paragraph 260-10-50…","pending":true,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0ac2d6887e1224066f226552d484446e7b4aa3b2cba053cc6f7d7a187d70d321","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-52","para":"55-52","html":"
The following table illustrates the computation of basic and diluted EPS for the year ended 20X1.
Transition date:(P) June 30, 2027; (N) June 30, 2027Transition guidance:
105-10-65-7The following table illustrates the computation of basic and diluted EPS for the year ended 20X1.
Diluted EPS was computed using the treasury stock method for warrants and the if-converted method for convertible instruments. Options to purchase 1,000,000 shares of common stock at $85 per share were outstanding during the second half of 20X1 but were not included in the computation of diluted EPS because the options' exercise price was greater than the average market price of the common shares. The options, which expire on June 30, 20Y1, were still outstanding at the end of year 20X1.
","snippet":"The following table illustrates the computation of basic and diluted EPS for the year ended 20X1.\nOptions to purchase 1,000,000 shares of common stock at $85 per share were outstanding during the second half of 20X1 but …","pending":true,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:99391ec7c8cd587679bcd6209d6e5e70b2787b685c17cefd87cbcda91bd20707","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-53","para":"55-53","html":"
This Example illustrates the contingent share provisions described in paragraphs 260-10-45-13 and
260-10-45-48 through 45-57
. This Example has the following assumptions:
  1. a
    Entity A had 100,000 shares of common stock outstanding during the entire year ended December 31, 20X1. It had no options, warrants, or convertible securities outstanding during the period.
  2. b
    Terms of a contingent stock agreement related to a recent business combination provided the following to certain shareholders of Entity A:
    1. 1
      1,000 additional common shares for each new retail site opened during 20X1
    2. 2
      5 additional common shares for each $100 of consolidated, after-tax net income in excess of $500,000 for the year ended December 31, 20X1.
  3. c
    Entity A opened two new retail sites during the year:
    1. 1
      One on May 1, 20X1
    2. 2
      One on September 1, 20X1.
  4. d
    Entity A's consolidated, year-to-date after-tax net income was:
    1. 1
      $400,000 as of March 31, 20X1
    2. 2
      $600,000 as of June 30, 20X1
    3. 3
      $450,000 as of September 30, 20X1
    4. 4
      $700,000 as of December 31, 20X1.
","snippet":"This Example illustrates the contingent share provisions described in paragraphs 260-10-45-13 and 260-10-45-48 through 45-57. This Example has the following assumptions:\n(a) Entity A had 100,000 shares of common stock ou…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c081e6076b98af53c6a6b0d7e8e44fbf92b0b1b1b614bfe2dd9a875439a94a24","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-54","para":"55-54","html":"
Note that in computing diluted EPS for an interim period, contingent shares are included as of the beginning of the period. For year-to-date computations, paragraph 260-10-45-49 requires that contingent shares be included on a weighted-average basis.
","snippet":"Note that in computing diluted EPS for an interim period, contingent shares are included as of the beginning of the period. For year-to-date computations, paragraph 260-10-45-49 requires that contingent shares be include…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a832b52f50df80b909ca20b42f4d0392b78d5e3fb3742fa1fcf18c185afba4f5","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-55","para":"55-55","html":"
The following table illustrates the quarterly and annual calculation of basic and diluted EPS.
","snippet":"The following table illustrates the quarterly and annual calculation of basic and diluted EPS.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:955ae00590f9556deaa774fe0504b00ee12e1307c7349e823968a72711a2dfd7","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-56","para":"55-56","html":"
First Quarter Second Quarter Third Quarter Fourth Quarter Full Year Basic EPS Computation Numerator \" $400,000 \" \" $200,000 \" \" $(150,000)\" \" $250,000 \" \" $700,000 \" Denominator: Common shares outstanding \"100,000 \" \"100,000 \" \"100,000 \" \"100,000 \" \"100,000 \" Retail site contingency 0 667 (a) \"1,333 \" (b) \"2,000 \" \"1,000 \" (c) Earnings contingency (d) 0 0 0 0 0 Total shares \"100,000 \" \"100,667 \" \"101,333 \" \"102,000 \" \"101,000 \" Basic EPS $4.00 $1.99 $(1.48) $2.45 $6.93 First Quarter Second Quarter Third Quarter Fourth Quarter Full Year Diluted EPS Computation Numerator \" $400,000 \" \" $200,000 \" \" $(150,000)\" \" $250,000 \" \" $700,000 \" Denominator: Common shares outstanding \"100,000 \" \"100,000 \" \"100,000 \" \"100,000 \" \"100,000 \" Retail site contingency 0 \"1,000 \" \"2,000 \" \"2,000 \" \"1,250 \" (e) Earnings contingency 0 (f) \"5,000 \" (g) 0 (h) \"10,000 \" (i) \"3,750 \" (j) Total shares \"100,000 \" \"106,000 \" \"102,000 \" \"112,000 \" \"105,000 \" Diluted EPS $4.00 $1.89 $(1.47) (k) $2.23 $6.67 (a) \"1,000 shares × ⅔\" (b) \"1,000 shares + (1,000 shares × ⅓)\" (c) \"(1,000 shares × 8/12) + (1,000 shares × 4/12)\" (d) The earnings contingency has no effect on basic EPS because it is not certain that the condition is satisfied until the end of the contingency period (see paragraphs 260-10-45-50 through 45-57). The effect is negligible for the fourth-quarter and full-year computations because it is not certain that the condition is met until the last day of the period. (e) \"(0 + 1,000 + 2,000 + 2,000) ÷ 4\" (f) \"Entity A did not have $500,000 year-to-date, after-tax net income at March 31, 20X1. Projecting future earnings levels and including the related contingent shares are not permitted by this Subtopic.\" (g) \"[($600,000 - $500,000) ÷ $100] × 5 shares\" (h) \"Year-to-date, after-tax net income was less than $500,000.\" (i) \"[($700,000 - $500,000) ÷ $100] × 5 shares\" (j) \"(0 + 5,000 + 0 + 10,000) ÷ 4\" (k) \"Loss during the third quarter is due to an extraordinary item; therefore, antidilution rules (see paragraph 260-10-45-17) do not apply.\"
","snippet":"","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c96e567cf9c69c1bc52b4332ebaa28086acd3c856653c08a18ce62bd196f2a22","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-57","para":"55-57","html":"
This Example illustrates the antidilution sequencing provisions described in paragraph 260-10-45-18 for Entity A for the year ended December 31, 20X0. This Example has the following assumptions:
  1. a
    Entity A had income available to common stockholders of $10,000,000 for the year 20X0.
  2. b
    2,000,000 shares of common stock were outstanding for the entire year 20X0.
  3. c
    The average market price of the common stock was $75.
  4. d
    Entity A had the following potential common shares outstanding during the year:
    1. 1
      Options (not compensation- related) to buy 100,000 shares of common stock at $60 per share.
    2. 2
      800,000 shares of convertible preferred stock entitled to a cumulative dividend of $8 per share. Each preferred share is convertible into two shares of common stock.
    3. 3
      5 percent convertible debentures with a principal amount of $100,000,000 (issued at par). Each $1,000 debenture is convertible into 20 shares of common stock.
  5. e
    The tax rate was 40 percent for 20X0.
","snippet":"This Example illustrates the antidilution sequencing provisions described in paragraph 260-10-45-18 for Entity A for the year ended December 31, 20X0. This Example has the following assumptions:\n(a) Entity A had income a…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:39f7566eda2b27b4f1e977a27b63daa683232ee274fda0121091d230dbc60aa1","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-58","para":"55-58","html":"
The following table illustrates calculation of earnings per incremental share.
","snippet":"The following table illustrates calculation of earnings per incremental share.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:46eb5433c344465505eab05ccabb2cd55a09db0f32627171428794645f6a1c33","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-59","para":"55-59","html":"
The following table illustrates calculation of diluted EPS.
","snippet":"The following table illustrates calculation of diluted EPS.\nNote that because diluted EPS increases from $3.23 to $3.45 when convertible preferred shares are included in the computation, those convertible preferred share…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:26dc9eb25f27f19a7ccedbb1ef87682ce88591bbd375d28534b1917e8b72208f","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-60","para":"55-60","html":"
This Example illustrates the provisions for stock rights issues that contain a bonus element as described in paragraphs
260-10-55-13 through 55-14
. This Example has the following assumptions:
  1. a
    Net income was $1,100 for the year ended December 31, 20X0.
  2. b
    500 common shares were outstanding for the entire year ended December 31, 20X0.
  3. c
    A rights issue was offered to all existing shareholders in January 20X1. The last date to exercise the rights was March 1, 20X1. The offer provided 1 common share for each 5 outstanding common shares (100 new shares).
  4. d
    The exercise price for the rights issue was $5 per share acquired.
  5. e
    The fair value of 1 common share was $11 at March 1, 20X1.
  6. f
    Basic EPS for the year 20X0 (prior to the rights issuance) was $2.20.
","snippet":"This Example illustrates the provisions for stock rights issues that contain a bonus element as described in paragraphs 260-10-55-13 through 55-14. This Example has the following assumptions:\n(a) Net income was $1,100 fo…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:84107967da029bfc767ddba0856c8e2b067aa8f15c9da7cc612d40f82515568d","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-61","para":"55-61","html":"
As a result of the bonus element in the January 20X1 rights issue, basic and diluted EPS for 20X0 will have to be adjusted retroactively. The number of common shares used in computing basic and diluted EPS is the number of shares outstanding immediately prior to the rights issue (500) multiplied by an adjustment factor. Prior to computing the adjustment factor, the theoretical ex-rights fair value per share must be computed. Those computations follow.
","snippet":"As a result of the bonus element in the January 20X1 rights issue, basic and diluted EPS for 20X0 will have to be adjusted retroactively. The number of common shares used in computing basic and diluted EPS is the number …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:57009ad1b80e6fc946f9e99421335de33932f70c5f0f3671c4579ecb222ffddb","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-62","para":"55-62","html":"
This Example illustrates the two-class method of computing basic EPS (see paragraph 260-10-45-60B) for an entity that has more than one class of nonconvertible securities. This method is described in paragraphs
260-10-45-59A through 45-70
. Diluted EPS would be computed in a similar manner. This Example has the following assumptions for the year 20X0:
  1. a
    Net income was $65,000.
  2. b
    10,000 shares of $50 par value common stock were outstanding.
  3. c
    5,000 shares of $100 par value nonconvertible preferred stock were outstanding.
  4. d
    The preferred stock was entitled to a noncumulative annual dividend of $5 per share before any dividend is paid on common stock.
  5. e
    After common stock has been paid a dividend of $2 per share, the preferred stock then participates in any additional dividends on a 40:60 per-share ratio with common stock. (That is, after preferred and common stock have been paid dividends of $5 and $2 per share, respectively, preferred stock participates in any additional dividends at a rate of two-thirds of the additional amount paid to common stock on a per-share basis.)
  6. f
    Preferred stockholders have been paid $27,000 ($5.40 per share).
  7. g
    Common stockholders have been paid $26,000 ($2.60 per share).
","snippet":"This Example illustrates the two-class method of computing basic EPS (see paragraph 260-10-45-60B) for an entity that has more than one class of nonconvertible securities. This method is described in paragraphs 260-10-45…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a0fd685862b0b36765f296eb84ec8331f37cc3a8ebe9c32ef369702d0cb9aee3","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-63","para":"55-63","html":"
Basic EPS for 20X0 would be computed as follows.
","snippet":"Basic EPS for 20X0 would be computed as follows.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:01fd1c85772f7e33bd4a6a0fb98c4d607a025656647ec6a41ec5e4a2a1ac04c6","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-64","para":"55-64","html":"
This Example illustrates the EPS computations for a subsidiary's securities that enable their holders to obtain the subsidiary's common stock based on the provisions in paragraph 260-10-55-20. The facts assumed are as follows:
","snippet":"This Example illustrates the EPS computations for a subsidiary's securities that enable their holders to obtain the subsidiary's common stock based on the provisions in paragraph 260-10-55-20. The facts assumed are as fo…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e36fea567f3df305b5e8abad72436634c2f2456130d52a052723ba5bf748a4cd","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-65","para":"55-65","html":"
Parent Entity:
  1. a
    Net income was $10,000 (excluding any earnings of or dividends paid by the subsidiary).
  2. b
    10,000 shares of common stock were outstanding; the parent entity had not issued any other securities.
  3. c
    The parent entity owned 900 common shares of a domestic subsidiary entity.
  4. d
    The parent entity owned 40 warrants issued by the subsidiary.
  5. e
    The parent entity owned 100 shares of convertible preferred stock issued by the subsidiary.
","snippet":"Parent Entity:\n(a) Net income was $10,000 (excluding any earnings of or dividends paid by the subsidiary).\n(b) 10,000 shares of common stock were outstanding; the parent entity had not issued any other securities.\n(c) Th…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:85dddac3343dd1e5950a054d4dadbfd8829b2427f66df757a51bb53f52fd1f1f","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-66","para":"55-66","html":"
Subsidiary Entity:
  1. a
    Net income was $3,600.
  2. b
    1,000 shares of common stock were outstanding.
  3. c
    Warrants exercisable to purchase 200 shares of its common stock at $10 per share (assume $20 average market price for common stock) were outstanding.
  4. d
    200 shares of convertible preferred stock were outstanding. Each share is convertible into two shares of common stock.
  5. e
    The convertible preferred stock paid a dividend of $1.50 per share.
  6. f
    No interentity eliminations or adjustments were necessary except for dividends.
  7. g
    Income taxes have been ignored for simplicity.
","snippet":"Subsidiary Entity:\n(a) Net income was $3,600.\n(b) 1,000 shares of common stock were outstanding.\n(c) Warrants exercisable to purchase 200 shares of its common stock at $10 per share (assume $20 average market price for c…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5e3b4bf4824f064ca9e1988d3e47e2f8fa6ce21bc593cb1b57d27ecb99384143","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-67","para":"55-67","html":"
The following table illustrates subsidiary's EPS.
","snippet":"The following table illustrates subsidiary's EPS.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e2c35a74faa2d6d34a2abd623921de31c14dbaadf5280247389c3a2a3a63c805","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-68","para":"55-68","html":"
This Example illustrates the guidance in paragraph 260-10-45-28A for the application of the treasury stock method when share options are forfeited.
","snippet":"This Example illustrates the guidance in paragraph 260-10-45-28A for the application of the treasury stock method when share options are forfeited.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1d5e6e78adefdd0a4583a69ba9cd69d5a6bb8abc1a0284e1b175673c44965732","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-69","para":"55-69","html":"
Entity A adopted a share option plan on January 1, 20X7, and granted 900,000 at-the-money share options with an exercise price of $30. All share options vest at the end of three years (cliff vesting). Entity A's accounting policy is to estimate the number of forfeitures expected to occur in accordance with paragraph 718-10-35-1D or 718-10-35-3. At the grant date, Entity A assumes an annual forfeiture rate of 3 percent and therefore expects to receive the service for 821,406 [900,000 × (.97 to the third power)] share options. On January 1, 20X7, the fair value of each share option granted is $14.69. Grantees forfeited 15,000 stock options ratably during 20X7.
","snippet":"Entity A adopted a share option plan on January 1, 20X7, and granted 900,000 at-the-money share options with an exercise price of $30. All share options vest at the end of three years (cliff vesting). Entity A's accounti…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e4d54d0ae71d5a9b752209ef09a7550e5b6caa770a931eab53d97638f7ffcf3c","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-69A","para":"55-69A","html":"
The average stock price during 20X7 is $44. Net income for the period is $97,385,602. For the year ended December 31, 20X7, there are 25,000,000 weighted-average common shares outstanding. This guidance also applies if the service inception date precedes the grant date.
","snippet":"The average stock price during 20X7 is $44. Net income for the period is $97,385,602. For the year ended December 31, 20X7, there are 25,000,000 weighted-average common shares outstanding. This guidance also applies if t…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:645917ee04fec1157852b4ebf1ce79df27bed7c43d828c0b155d04ab533606ac","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-70","para":"55-70","html":"
The following table illustrates computation of basic and diluted EPS for the year ended December 31, 20X7.
","snippet":"The following table illustrates computation of basic and diluted EPS for the year ended December 31, 20X7.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:07ba5d0af003f516f68c72fce5b1bea4ad7a610378be1d86a3e62b82d0c690db","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-71","para":"55-71","html":"
Participating securities should be included in the computation of basic earnings per share using the two-class method. The following Cases illustrate the guidance in paragraphs
260-10-45-59A through 45-70
for the application of the two-class method of computing basic earnings per share when:
  1. a
    An entity has participating convertible preferred stock (Case A).
  2. b
    An entity has participating convertible bonds (Case B).
  3. c
    An entity has participating warrants (Case C).
  4. d
    An entity has participating share-based payment awards (Case D).
","snippet":"Participating securities should be included in the computation of basic earnings per share using the two-class method. The following Cases illustrate the guidance in paragraphs 260-10-45-59A through 45-70 for the applica…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:51ee52f685f5de92bd5c69669246ea8f05b3f98109a3787831f0bcc2a26f13ec","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-72","para":"55-72","html":"
The application of the two-class method in each of Cases A, B, and C presents an EPS calculation for both the common stock and the participating security. This presentation is for illustrative purposes only. The presentation of EPS is only required for each class of common stock (as clarified by this Example). However, the presentation of basic and diluted EPS for a participating security other than common stock is not precluded. Cases A, B, and C share both of the following assumptions:
  1. a
    10,000 shares of Class A common stock
  2. b
    Reported net income of $65,000 for 20X1.
","snippet":"The application of the two-class method in each of Cases A, B, and C presents an EPS calculation for both the common stock and the participating security. This presentation is for illustrative purposes only. The presenta…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:26ebf514162328776b093dbc5be2a3d1400aba74705439bc25e5b7211602380a","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-73","para":"55-73","html":"
Assume that Entity A had 5,000 shares of preferred stock outstanding during 20X1. Each share of preferred stock is convertible into two shares of Class A common stock. The preferred stock is entitled to a noncumulative annual dividend of $5 per share. After Class A has been paid a dividend of $2 per share, the preferred stock then participates in any additional dividends on a 40:60 per share ratio with Class A. For 20X1, the Class A shareholders have been paid $26,000 (or $2.60 per share), and the preferred shareholders have been paid $27,000 (or $5.40 per share). Basic EPS under the two-class method for 20X1 would be computed as follows.
","snippet":"Assume that Entity A had 5,000 shares of preferred stock outstanding during 20X1. Each share of preferred stock is convertible into two shares of Class A common stock. The preferred stock is entitled to a noncumulative a…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:525598015ae55530fc1495aadd377a3acc22e54b18d1b2940e2d479c28a3f510","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-74","para":"55-74","html":"
Assume that on January 1, 20X1, Entity A issues 1,000 30-year convertible bonds with an aggregate par value of $1,000,000. Each bond is convertible into 8 shares of Class A common stock and carries a coupon rate of 3 percent. After Class A has been paid a dividend of $2 per share, the bondholders then participate in any additional dividends on a 40:60 per share ratio with Class A shareholders. The bondholders receive common stock dividends based on the number of shares of common stock that the bonds are convertible into. The bondholders do not have any voting rights prior to conversion into common stock. For 20X1, the Class A shareholders have been paid $20,000 (or $2.00 per share). Basic EPS under the two-class method for 20X1 would be computed as follows.
","snippet":"Assume that on January 1, 20X1, Entity A issues 1,000 30-year convertible bonds with an aggregate par value of $1,000,000. Each bond is convertible into 8 shares of Class A common stock and carries a coupon rate of 3 per…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ea8d0493f208d48ef0f697f93b756a9c3760e949988654a7c237ea5ab2c35144","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-75","para":"55-75","html":"
Assume that Entity A had warrants to purchase 5,000 shares of common stock outstanding during 20X1 Each warrant entitles the holder to purchase 1 share of common stock at $10 (fair value at date of grant) per share. In addition, the warrant holders receive dividends on the underlying common stock to the extent they are declared. For 20X1, common shareholders have been paid $26,000 (or $2.60 per share), and the warrant holders have been paid $13,000 (or, also, $2.60 per share). Basic EPS under the two-class method for 20X1 would be computed as follows: Or, to simplify, since the common shareholders and the warrant holders share in dividends on a one-to-one basis, undistributed earnings could also be calculated as follows.
","snippet":"Assume that Entity A had warrants to purchase 5,000 shares of common stock outstanding during 20X1 Each warrant entitles the holder to purchase 1 share of common stock at $10 (fair value at date of grant) per share. In a…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:389a597f9acd883d938e03e6aa03719f69a2fb90b2370bd3cbbe049c23c8dd53","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-76","para":"55-76","html":"
Paragraph not used.
","snippet":"Paragraph not used.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d48a1d14bc3a24a69917436d8ba2eedc68714350132bf37f25b1e7821d4e4594","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-76A","para":"55-76A","html":"
Assume that Entity A had 25,000 shares of common stock and 5,000 unvested share-based payment awards outstanding during 20X8 and reported net income of $100,000. The share-based payment awards participate in any dividends on a 1:1 per-share ratio with common stock, and the dividends are nonforfeitable by the holder of the share-based payment awards. Entity A's accounting policy is to estimate the number of forfeitures expected to occur in accordance with paragraph 718-10-35-3.
","snippet":"Assume that Entity A had 25,000 shares of common stock and 5,000 unvested share-based payment awards outstanding during 20X8 and reported net income of $100,000. The share-based payment awards participate in any dividend…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b0e0a5812c50f6e13684b9848fd18db3fb0724b01348c8f71ce289bc505d9d96","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-76B","para":"55-76B","html":"
As of the beginning of 20X8, Entity A estimated that the requisite service will not be provided for 200 of the 5,000 share-based payment awards outstanding. At the end of 20X8, Entity A adjusts its estimate to reflect an increased expected forfeiture rate and now expects that the requisite service will not be provided for 300 awards. It recognizes the cumulative effect of this change in compensation cost in the current period.
","snippet":"As of the beginning of 20X8, Entity A estimated that the requisite service will not be provided for 200 of the 5,000 share-based payment awards outstanding. At the end of 20X8, Entity A adjusts its estimate to reflect an…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:404ede79c478d2cfc557f9bece359152af6496506e53143aae995547420cf7ed","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-76C","para":"55-76C","html":"
Entity A paid a $1.50 per-share dividend at the end of 20X8. Net income includes an expense of $450 related to dividends paid to the awards for which the requisite service is not expected to be rendered in accordance with paragraph 718-10-55-45. Basic EPS under the two-class method for 20X8 would be computed as follows:
","snippet":"Entity A paid a $1.50 per-share dividend at the end of 20X8. Net income includes an expense of $450 related to dividends paid to the awards for which the requisite service is not expected to be rendered in accordance wit…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3fae21112f153b4f25d9bc2104f40ec58ddcf0189605224cf32ab179df11855c","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-76D","para":"55-76D","html":"
Note that in this illustrative example, application of the two-class method presents an EPS calculation for both the common stock and the participating security, that is, the unvested share-based payment awards. This presentation is for illustrative purposes only. The presentation of EPS is only required for each class of common stock. However, the presentation of basic and diluted EPS for a participating security other than common stock is not precluded. The disclosure in the notes to financial statements of actual distributions to unvested share-based payment awards, rather than the amount presented as distributed earnings, also is not precluded to reconcile earnings per common share and per unvested share-based payment awards. For example, Entity A in the example above may disclose that actual distributions to unvested share-based payment awards were $7,500 and that $450 of those distributions was included in net income as compensation cost related to awards for which the requisite service is not expected to be rendered. Disclosure on a per-share basis also is not precluded.
","snippet":"Note that in this illustrative example, application of the two-class method presents an EPS calculation for both the common stock and the participating security, that is, the unvested share-based payment awards. This pre…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e501a4ee8d4bbe04b0ba575996948d49cbb892cd3c366147bdd81e079c136142","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-77","para":"55-77","html":"
Paragraph not used.
","snippet":"Paragraph not used.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e8a3906730096a280fbf778f16bb6c7463488ba9e9cfa97dc90279afec3939b8","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-78","para":"55-78","html":"
The following Cases illustrate the guidance in paragraphs
260-10-45-43 through 45-46
related to diluted EPS computations for three examples of contingently convertible instruments:
  1. a
    Contingently convertible debt with a market price trigger (Case A)
  2. b
    Contingently convertible debt with a market price trigger, issuer must settle the principal amount of the debt in cash, but may settle any conversion premium in either cash or stock (Case B)
  3. c
    Convertible debt for which the principal and conversion premium can be settled in any combination of shares or cash (Case C).
","snippet":"The following Cases illustrate the guidance in paragraphs 260-10-45-43 through 45-46related to diluted EPS computations for three examples of contingently convertible instruments:\n(a) Contingently convertible debt with a…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7bc827872c08bef4e60028bda5247201bcaa114768381fcdd9b58607b0a84b95","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-79","para":"55-79","html":"
Cases A, B, and C share all of the following assumptions:
  1. a
    Principal amount of the convertible debt: $1,000
  2. b
    Conversion ratio: 20
  3. c
    Conversion price per share of common stock: $50 Conversion price = (Convertible bond's principal amount) ÷ (Conversion ratio) = $1,000 ÷ 20 = $50.
  4. d
    Share price of common stock at issuance: $40
  5. e
    Market price trigger: average share price for the year must exceed $65 (130% of conversion price)
  6. f
    Interest rate: 4%
  7. g
    Effective tax rate: 35%
  8. h
    Shares of common stock outstanding: 2,000.
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The holder of the debt may convert the debt into shares of common stock when the share price exceeds the market price trigger; otherwise, the holder is only entitled to the par value of the debt.
","snippet":"The holder of the debt may convert the debt into shares of common stock when the share price exceeds the market price trigger; otherwise, the holder is only entitled to the par value of the debt.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0e48d8ccd678b372243bbb50b610cd5d03ba3276b713935ed1508517d6a7a615","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-82","para":"55-82","html":"
The contingently convertible debt is issued on January 1, 200X, income available to common shareholders for the year ended December 31, 200X, is $10,000, and the average share price for the year is $55. The issuer of the contingently convertible debt should apply the guidance in paragraphs
260-10-45-43 through 45-44
which requires the issuer to include the dilutive effect of the convertible debt in diluted EPS even though the market price trigger of $65 has not been met. In this Case, basic EPS is $5.00. (Basic EPS = [Income available to common shareholders (IACS)] ÷ [Shares outstanding (SO)] = $10,000 ÷ 2,000 shares = $5.00 per share) and applying the if-converted method to the debt instrument dilutes EPS to $4.96 (Diluted EPS computed using the if-converted method = [IACS + Interest (1-tax rate)] ÷ (SO + Potential common shares) = ($10,000 + $26) ÷ (2,000 + 20) shares = $4.96 per share.)
","snippet":"The contingently convertible debt is issued on January 1, 200X, income available to common shareholders for the year ended December 31, 200X, is $10,000, and the average share price for the year is $55. The issuer of the…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:776706ca5e94fd569188569c69aec9643ee4d9f20b9fac114e8b3fab7e487079","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-83","para":"55-83","html":"
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The issuer of the contingently convertible debt must settle the principal amount of the debt in cash upon conversion and it may settle any conversion premium in either cash or stock. The holder of the instrument is only entitled to the conversion premium if the share price exceeds the market price trigger. The contingently convertible instrument is issued on January 1, 200X, income available to common shareholders for the year ended December 31, 200X is $9,980, and the average share price for the year is $64.
","snippet":"The issuer of the contingently convertible debt must settle the principal amount of the debt in cash upon conversion and it may settle any conversion premium in either cash or stock. The holder of the instrument is only …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:69aaa4c336027f431ad5f7a0a34be0e4d4987bf8b3546124100e6830ae543915","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-84A","para":"55-84A","html":"
The if-converted method should be used to determine the earnings-per-share implications of convertible debt with the characteristics described in this Case. There would be no adjustment to the numerator in the diluted earnings-per-share computation for the cash-settled portion of the instrument (the principal amount of the debt) because that portion will always be settled in cash (see paragraph 260-10-45-40). The conversion premium should be included in diluted earnings per share based on the provisions of paragraphs
260-10-45-45 through 45-46
and 260-10-55-32 through 55-36A. The convertible debt instrument in this Case is subject to other applicable guidance in Subtopic 260-10 as well, including the antidilution provisions of that Subtopic.
","snippet":"The if-converted method should be used to determine the earnings-per-share implications of convertible debt with the characteristics described in this Case. There would be no adjustment to the numerator in the diluted ea…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:546aa6f0afd4bd1f8efc19c63b14f3e9869d472b0d0139aea2b9cb17c5b0590a","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-84B","para":"55-84B","html":"
In this Example, basic EPS is $4.99, and diluted earnings per share is $4.98. Basic EPS = IACS ÷ SO = $9,980 ÷ 2,000 shares = $4.99 per share. Diluted EPS would be calculated using the if-converted method by determining the number of shares needed to settle the conversion premium and adding that amount to shares outstanding to calculate the diluted EPS denominator. The average market price is used to determine the dilution in accordance with paragraph 260-10-45-21A. The effect would be dilutive in this case because the average market price of the shares exceeds the conversion price. However, if the average market price of the shares was less than the conversion price, then the conversion premium would be zero and there would be no dilutive effect. Diluted EPS = IACS ÷ (SO + Potential common shares) = ($9,980) ÷ (2,000 + 4.38) shares = $4.98 per share. Potential common shares = (Conversion spread value) ÷ (Average share price) = $14 × 20 shares ÷ $64 = 4.38 shares.
","snippet":"In this Example, basic EPS is $4.99, and diluted earnings per share is $4.98. Basic EPS = IACS ÷ SO = $9,980 ÷ 2,000 shares = $4.99 per share. Diluted EPS would be calculated using the if-converted method by determining …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b6d0e1a4e85acd413543bdf8408ec092708f45c8e34234a5092f8a1acda62eb9","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-84C","para":"55-84C","html":"
The issuer of the convertible debt can settle the principal and the conversion premium in any combination of cash or shares (the issuer has the option). Consistent with the facts in Case B, the convertible instrument is issued on January 1, 200X, income available to common shareholders for the year ended December 31, 200X, is $9,980, and the average share price for the year is $64.
","snippet":"The issuer of the convertible debt can settle the principal and the conversion premium in any combination of cash or shares (the issuer has the option). Consistent with the facts in Case B, the convertible instrument is …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:59e8adf4e600a543f81a32c14f5ab65fe3b7d108c70bdb7e05987126fb3ee2d3","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-84D","para":"55-84D","html":"
The if-converted method should be used to determine the earnings-per-share implications of convertible debt. The effect of settling the principal and conversion premium in shares is included for purposes of calculating diluted earnings per share in accordance with the guidance in paragraph 260-10-45-45.
","snippet":"The if-converted method should be used to determine the earnings-per-share implications of convertible debt. The effect of settling the principal and conversion premium in shares is included for purposes of calculating d…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9ed57548b288d6f2dbbb2f2f53e6725ac08c49180dff5a154b1d9a6a87219eaa","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-84E","para":"55-84E","html":"
In this case, basic EPS is $4.99 (the same calculation in paragraph 260-10-55-84B), and diluted earnings per share is $4.95. Diluted EPS is calculated using the if-converted method = [IACS + Interest (1-tax rate)] ÷ (SO + Potential common shares) = (9,980 + 26) ÷ (2,000 + 20). See paragraph 260-10-55-82 for interest expense amount.
","snippet":"In this case, basic EPS is $4.99 (the same calculation in paragraph 260-10-55-84B), and diluted earnings per share is $4.95. Diluted EPS is calculated using the if-converted method = [IACS + Interest (1-tax rate)] ÷ (SO …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:36d0e5b424ae6d987390dea7ca4db75401fb593b74dffd54104c97bf6717a3b6","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-85","para":"55-85","html":"
The following Cases illustrate the guidance in paragraphs
260-10-55-3A through 55-3B
for the quarterly and annual computations of basic and diluted EPS for a company with options outstanding (equal to 20,000 incremental shares) that were in the money for the entire year (for simplicity purposes, this Example assumes that the stock price never changed). Case A addresses year-to-date loss, and Case B addresses year-to-date income. Note that in Case A, due to a loss for the period, zero incremental shares are included because the effect would be antidilutive. Note that in Case B, zero shares included due to loss in the period.
Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:
260-10-65-5The following Cases illustrate the guidance in paragraphs 260-10-55-3Aand 260-10-55-3Cfor the quarterly and annual computations of basic and diluted EPS for a company with options outstanding (equal to 20,000 incremental shares) that were in the money for the entire year (for simplicity purposes, this Example assumes that the stock price never changed). Case A addresses year-to-date loss, and Case B addresses year-to-date income. Note that in Case A, zero incremental shares are included because the effect would be antidilutive. Note that in Case B, zero incremental shares are included in the quarterly diluted EPS computations for the first and second quarters or in the year-to-date diluted EPS computations for the three- and six-month periods because the effect would be antidilutive.
","snippet":"The following Cases illustrate the guidance in paragraphs 260-10-55-3A through 55-3B for the quarterly and annual computations of basic and diluted EPS for a company with options outstanding (equal to 20,000 incremental …","pending":true,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:24b1619ef98dd68a5f2365a411b16b3e5800230f0aa19e8aeaadb302cb2b5754","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-86","para":"55-86","html":"
The following tables illustrate the computation of quarterly and year-to-date EPS.
Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:
260-10-65-5The following tables illustrate the computation of quarterly and year-to-date EPS.
","snippet":"The following tables illustrate the computation of quarterly and year-to-date EPS.\nTransition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:260-10-65-5The following tables illustrate the computatio…","pending":true,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:09d2aaefee06dcefbb80ccf2b0ef04965fd85ce5701eb239f60d7ff3452ddf7a","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-87","para":"55-87","html":"
The following tables illustrate the computation of quarterly and year-to-date EPS.
Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:
260-10-65-5The following tables illustrate the computation of quarterly and year-to-date EPS.
","snippet":"The following tables illustrate the computation of quarterly and year-to-date EPS.\nNote that if the options had been out of the money in any quarter, zero incremental shares would have been included for that quarter in t…","pending":true,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1baa0d2aa744ad2354db0cb4ddc0bf4a6f2ced0f016b52e14c4bac8c0a088da1","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-88","para":"55-88","html":"
Example 1 in Subtopic 505-30 (see paragraph 505-30-55-1) illustrates the accounting for what is sometimes described as an accelerated share repurchase program. In that Example, separate transactions involving a treasury stock purchase and a forward contract are addressed. This Example addresses the EPS consequences of those transactions.
","snippet":"Example 1 in Subtopic 505-30 (see paragraph 505-30-55-1) illustrates the accounting for what is sometimes described as an accelerated share repurchase program. In that Example, separate transactions involving a treasury …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3f1a2747163c8123c57ccf7063920ba178ade8dac648e9d50292f1303b32a662","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-89","para":"55-89","html":"
The treasury stock transaction would result in an immediate reduction of the outstanding shares used to calculate the weighted-average common shares outstanding for both basic and diluted EPS. The effect of the forward contract on diluted EPS would be calculated in accordance with this Subtopic.
","snippet":"The treasury stock transaction would result in an immediate reduction of the outstanding shares used to calculate the weighted-average common shares outstanding for both basic and diluted EPS. The effect of the forward c…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6534c095da35d5e9a41c18644d30e8d58d24cacfd10cdae9483361dd1fbeabd1","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-90","para":"55-90","html":"
This Example illustrates the guidance in paragraph 260-10-45-18.
Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:
260-10-65-5
Editor's Note: Paragraph 260-10-55-90 will be amended upon transition, together with its heading:
• > Example 14: Potential Antidilutive Securities
This Example illustrates the guidance in paragraphs
260-10-45-18 through 45-20
.
","snippet":"This Example illustrates the guidance in paragraph 260-10-45-18.Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:260-10-65-5\nEditor's Note: Paragraph 260-10-55-90 will be amended upon trans…","pending":true,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:fa136dbd14e6fa69de15cf683e4a4341f14b284fd8a989b30bcabce91baf23d4","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-91","para":"55-91","html":"
Assume that Entity A has income from continuing operations of $2,400, a loss from discontinued operations of $(3,600), a net loss of $(1,200), and 1,000 common shares and 200 potential common shares outstanding. Entity A's basic per-share amounts would be $2.40 for continuing operations, $(3.60) for the discontinued operation, and $(1.20) for the net loss. Entity A would include the 200 potential common shares in the denominator of its diluted per-share computation for continuing operations because the resulting $2.00 per share is dilutive. (For illustrative purposes, assume no numerator impact of those 200 potential common shares.) Because income from continuing operations is the control number, Entity A also must include those 200 potential common shares in the denominator for the other per-share amounts, even though the resulting per-share amounts [$(3.00) per share for the loss from discontinued operation and $(1.00) per share for the net loss] are antidilutive to their comparable basic per-share amounts; that is, the loss per-share amounts are less.
Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:
260-10-65-5Assume that Entity A has income from continuing operations of $2,400, a loss from discontinued operations of $(3,600), a net loss of $(1,200), and 1,000 common shares outstanding and 200 potential common shares outstanding. Entity A's basic per-share amounts would be $2.40 for continuing operations, $(3.60) for the discontinued operation, and $(1.20) for the net loss. Entity A would include the 200 potential common shares in the denominator of its diluted per-share computation for continuing operations because the resulting $2.00 per share is dilutive. (For illustrative purposes, assume no numerator impact of those 200 potential common shares because they are from an equity classified instrument.) Because income from continuing operations is the control number, Entity A also must include those 200 potential common shares in the denominator for the other per-share amounts, even though the resulting per-share amounts [$(3.00) per share for the loss from discontinued operation and $(1.00) per share for the net loss] are antidilutive to their comparable basic per-share amounts; that is, the loss per-share amounts are less.
","snippet":"Assume that Entity A has income from continuing operations of $2,400, a loss from discontinued operations of $(3,600), a net loss of $(1,200), and 1,000 common shares and 200 potential common shares outstanding. Entity A…","pending":true,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:cd2682c7b1b460acce2d222a7a0438a8c15de9298ca05968d2eb2a56c3db4d25","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-91A","para":"55-91A","html":"
Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:
260-10-65-5However, assume that Entity A has a loss from continuing operations of $(380), a loss from discontinued operations of $(3,600), a net loss of $(3,980), and 1,000 common shares outstanding and 200 potential common shares outstanding from a liability classified instrument. During the period, Entity A recognized a fair value gain of $200, net of income tax, for the liability classified instrument. Entity A’s basic per-share amounts would be $(0.38) for continuing operations, $(3.60) for the discontinued operation, and $(3.98) for the net loss. For the diluted per-share computation, Entity A would make the following adjustments:
  1. a
    Adjust the numerator to remove the effect of the fair value gain of $200 recognized in the period for the liability classified instrument, resulting in an adjusted loss from continuing operations of $(580) and an adjusted net loss of $(4,180)
  2. b
    Adjust the denominator by including the 200 potential common shares.
Because loss from continuing operations is the control number and the combined effect of the adjustments has a dilutive effect, Entity A must include those adjustments in the diluted per-share computations and would report diluted per-share amounts of $(0.48) for continuing operations, $(3.00) for discontinued operations, and $(3.48) for the net loss for the period.
","snippet":"Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:260-10-65-5However, assume that Entity A has a loss from continuing operations of $(380), a loss from discontinued operations of $(3,600), a…","pending":true,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ac97b9cd47408f8bb5201ed49667391cfcedee77c8c3656b67eae9d011f801c5","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-92","para":"55-92","html":"
This Example illustrates the guidance in paragraphs
260-10-45-22 through 45-23
.
","snippet":"This Example illustrates the guidance in paragraphs 260-10-45-22 through 45-23.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:812668fbb87431ef20db8fb51203de5634e3c15878c1c63b53edbd18b76f34b9","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-93","para":"55-93","html":"
Consider Entity A that has 10,000 warrants outstanding exercisable at $54 per share; the average market price of the common stock during the reporting period is $60. Exercise of the warrants and issuance of 10,000 shares of common stock would be assumed. The $540,000 that would be realized from exercise of the warrants ($54 × 10,000) would be an amount sufficient to acquire 9,000 shares ($540,000/$60). Thus, 1,000 incremental shares (10,000 - 9,000) would be added to the outstanding common shares in computing diluted EPS for the period.
","snippet":"Consider Entity A that has 10,000 warrants outstanding exercisable at $54 per share; the average market price of the common stock during the reporting period is $60. Exercise of the warrants and issuance of 10,000 shares…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b89ca4a909af9443a02753baac8394b1f3c697c9aee3db0c78e55206ef581085","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-94","para":"55-94","html":"
The following is a shortcut formula for that computation (note that this formula may not be appropriate for share-based compensation awards [see paragraph 260-10-45-29]):
","snippet":"The following is a shortcut formula for that computation (note that this formula may not be appropriate for share-based compensation awards [see paragraph 260-10-45-29]):\nIncremental shares = [(market price - exercise pr…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e32d9fa8366fb0cdd5f57a11c07194b6e5f9cd4acd7636a252488322a2588cb6","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-95","para":"55-95","html":"
Assume Entity A issues warrants that permit the holder to buy 100 shares of its common stock for $10 per share and that Entity A presents EPS in accordance with the guidance in this Topic. The warrants have a 10-year term, are exercisable at any time, and contain a down round feature. The warrants are classified as equity by Entity A because they are indexed to the entity's own stock and meet the additional conditions necessary for equity classification in accordance with the guidance in Subtopic 815-40 on derivatives and hedging—contracts in entity's own equity (see paragraphs 815-40-55-33 through 55-34A for an illustration of the guidance in Subtopic 815-40 applied to a warrant with a down round feature). Because the warrants are an equity-classified freestanding financial instrument, they are within the scope of the recognition and measurement guidance in this Topic. The terms of the down round feature specify that if Entity A issues additional shares of its common stock for an amount less than $10 per share or issues an equity-classified financial instrument with a strike price below $10 per share, the strike price of the warrants would be reduced to the most recent issuance price or strike price, but the terms of the down round feature are such that the strike price cannot be reduced below $8 per share. After issuing the warrants, Entity A issues shares of its common stock at $7 per share. Because of the subsequent round of financing occurring at a share price below the strike price of the warrants, the down round feature in the warrants is triggered and the strike price of the warrants is reduced to $8 per share.
","snippet":"Assume Entity A issues warrants that permit the holder to buy 100 shares of its common stock for $10 per share and that Entity A presents EPS in accordance with the guidance in this Topic. The warrants have a 10-year ter…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a90da805d9d73933a8ff8511b7de4d2facec609ca2857452805261da4fa3fd3e","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-96","para":"55-96","html":"
In accordance with the measurement guidance in paragraphs
260-10-30-1 through 30-2
, Entity A determines that the fair value of the warrants (without the down round feature) with a strike price of $10 per share immediately after the down round feature is triggered is $600 and that the fair value of the warrants (without the down round feature) with a strike price of $8 per share immediately after the down round feature is triggered is $750. The increase in the value of $150 is the value of the effect of the triggering of the down round feature.
","snippet":"In accordance with the measurement guidance in paragraphs 260-10-30-1 through 30-2, Entity A determines that the fair value of the warrants (without the down round feature) with a strike price of $10 per share immediatel…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:223866be754512eefd7e83028c30217437a4407c7715f7d39eab889f6773b5cc","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-97","para":"55-97","html":"
The $150 increase is the value of the effect of the down round feature to be recognized in equity in accordance with paragraph 260-10-25-1, as follows: Additionally, Entity A reduces income available to common stockholders in its basic EPS calculation by $150 in accordance with the guidance in paragraph 260-10-45-12B. Entity A applies the treasury stock method in accordance with paragraphs
260-10-45-23 through 45-27
to calculate diluted EPS. Accordingly, the $150 is added back to income available to common stockholders when calculating diluted EPS. However, the treasury stock method would not be applied if the effect were to be antidilutive.
","snippet":"The $150 increase is the value of the effect of the down round feature to be recognized in equity in accordance with paragraph 260-10-25-1, as follows:\nAdditionally, Entity A reduces income available to common stockholde…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:978e9c67dcad1192810396394682183bff1a09967117022310c4d81e89de58dd","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-98","para":"55-98","html":"
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This Subsection, which is an integral part of the requirements of this Subtopic, provides general guidance used to compute earnings per unit for master limited partnerships.
","snippet":"This Subsection, which is an integral part of the requirements of this Subtopic, provides general guidance used to compute earnings per unit for master limited partnerships.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:90cf4f46b43fcedf24f477b503a7c2810302b11d1eb81db127d4ee9ef5aaadf0","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e59c57170915e037d0247892c1e9213ff8b95d258f592d81abedb1d704849a8e","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"block":"Master Limited Partnerships","heading":"Implementation Guidance","paragraphs":[{"citation":"260-10-55-103","para":"55-103","html":"
When calculating earnings per unit under the two-class method for a master limited partnership, net income (or loss) for the current reporting period shall be reduced (or increased) by the amount of available cash that has been or will be distributed to the general partner, limited partners, and incentive distribution right holder for that reporting period. For example, assume a partnership agreement requires the general partner to distribute available cash within 60 days following the end of each fiscal quarter. The master limited partnership is required to file financial statements with a regulatory agency within 45 days following the end of each fiscal quarter. In order to compute earnings per unit for the first quarter, the general partner determines the amount of available cash that will be distributed to the general partner, limited partners, and incentive distribution right holder for that first quarter. The master limited partnership would reduce (or increase) net income (or loss) by that amount in computing undistributed earnings that are allocated to the general partner, limited partners, and incentive distribution right holder in calculating earnings per unit for the first quarter.
","snippet":"When calculating earnings per unit under the two-class method for a master limited partnership, net income (or loss) for the current reporting period shall be reduced (or increased) by the amount of available cash that h…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4392e84ac6c2aa8be9e5daf0e6a900a2e3f322f7b288af07cc469fd244dc2bb2","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-104","para":"55-104","html":"
Undistributed earnings shall be allocated to the general partner, limited partners, and incentive distribution right holder utilizing the contractual terms of the partnership agreement. The distribution waterfall (that is, a schedule that prescribes distributions to the various interest holders at each threshold) for available cash specified in the partnership agreement contractually mandates the way in which earnings are distributed for the period presented. The undistributed earnings shall be allocated to the incentive distribution right holder based on the contractual participation rights of the incentive distribution right to share in current period earnings. Therefore, if the partnership agreement includes a specified threshold as described in paragraph 260-10-55-30, a master limited partnership shall not allocate undistributed earnings to the incentive distribution right holder once the specified threshold has been met.
","snippet":"Undistributed earnings shall be allocated to the general partner, limited partners, and incentive distribution right holder utilizing the contractual terms of the partnership agreement. The distribution waterfall (that i…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8c9000381408533f4485fbe14ae83d56394cfbde58d2a8ae7109220f3fecf856","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-105","para":"55-105","html":"
In determining whether a specified threshold exists, a master limited partnership shall evaluate whether distributions to the incentive distribution right holder would be contractually limited to available cash as defined in the partnership agreement if all earnings for the period were distributed. For example, if the partnership agreement contractually limits distributions to the incentive distribution right holder to the holder's share of available cash as defined in the partnership agreement, then the specified threshold for the current reporting period would be the holder's share of available cash that has been or will be distributed for that reporting period. The master limited partnership would not allocate undistributed earnings to the incentive distribution right holder because the holder's share of available cash is the maximum amount that the incentive distribution right holder would be contractually entitled to receive if all earnings for the current reporting period were distributed. However, if the partnership agreement is silent or does not explicitly limit distributions to the incentive distribution right holder to available cash, then the master limited partnership would allocate undistributed earnings to the incentive distribution right holder utilizing the distribution waterfall for available cash specified in the partnership agreement.
","snippet":"In determining whether a specified threshold exists, a master limited partnership shall evaluate whether distributions to the incentive distribution right holder would be contractually limited to available cash as define…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a94d0983ffe5d10339aa231848c283e3d2fa64a652ac6648bd8fd88bc89aa6e9","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-106","para":"55-106","html":"
Any excess of distributions over earnings shall be allocated to the general partner and limited partners based on their respective sharing of losses specified in the partnership agreement (that is, the provisions for allocation of losses to the partners' capital accounts for the period presented). If the incentive distribution right holders do not share in losses, the excess of distribution over earnings amount would not be allocated to the incentive distribution right holders. However, if the incentive distribution right holders have a contractual obligation to share in the losses of the master limited partnership on a basis that is objectively determinable (as described in paragraph 260-10-45-68), the excess of distributions over earnings shall be allocated to the general partner, limited partners, and incentive distribution right holders based on their respective sharing of losses specified in the partnership agreement for the period presented.
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When calculating earnings per unit under the two-class method for a master limited partnership, net income (or loss) for the current reporting period shall be reduced (or increased) by the amount of available cash that has been or will be distributed to the general partner (including the distribution rights of the embedded incentive distribution rights) and limited partners for that reporting period. For example, assume that a partnership agreement requires the general partner to distribute available cash within 60 days following the end of each fiscal quarter. The master limited partnership is required to file financial statements with a regulatory agency within 45 days following the end of each fiscal quarter. In order to compute earnings per unit for the first quarter, the general partner determines the amount of available cash that will be distributed to the general partner and limited partners for that first quarter. The master limited partnership would reduce (or increase) net income (or loss) by that amount in computing undistributed earnings that are allocated to the general partner (including the distribution rights of the embedded incentive distribution rights) and limited partners in calculating earnings per unit for the first quarter.
","snippet":"When calculating earnings per unit under the two-class method for a master limited partnership, net income (or loss) for the current reporting period shall be reduced (or increased) by the amount of available cash that h…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3f5f973d0a19e466b10eb70ab523ca2a011145a39a70398de914fa5fedbf02ef","downloaded_from":"2026-09-09T23:19:12.977Z","last_downloaded_at":"2026-09-09T23:19:12.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482635","source_sha256":"80da525ca64ce6f8c3f87d2a21f8763ecee6299fe92c5a521b7b2ddb49dd3f32"}},{"citation":"260-10-55-108","para":"55-108","html":"
Undistributed earnings shall be allocated to the general partner (including the distribution rights of the embedded incentive distribution rights) and limited partners utilizing the contractual terms of the partnership agreement. The distribution waterfall for available cash specified in the partnership agreement contractually mandates the way in which earnings are distributed for the period presented. The undistributed earnings shall be allocated to the general partner (with respect to the distribution rights of an embedded incentive distribution right) based on the contractual participation rights of the incentive distribution right to share in current period earnings. Therefore, if the partnership agreement includes a specified threshold as described in paragraph 260-10-55-30, a master limited partnership shall not allocate undistributed earnings to the general partner (with respect to the distribution rights of an embedded incentive distribution right) once the specified threshold has been met.
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In determining whether a specified threshold exists, a master limited partnership shall evaluate whether distributions to the general partner (with respect to the distribution rights of an embedded incentive distribution right) would be contractually limited to available cash as defined in the partnership agreement if all earnings for the period were distributed. For example, if the partnership agreement contractually limits distributions to the general partner (with respect to the distribution rights of an embedded incentive distribution right) to the holder's share of available cash as defined in the partnership agreement, then the specified threshold for the current reporting period would be the general partner's share (with respect to the distribution rights of an embedded incentive distribution right) of available cash that has been or will be distributed for that reporting period. The master limited partnership would not allocate undistributed earnings to the general partner (with respect to the distribution rights of an embedded incentive distribution right) because the general partner's share (with respect to the distribution rights of an embedded incentive distribution right) of available cash is the maximum amount that the general partner (with respect to the distribution rights of an embedded incentive distribution right) would be contractually entitled to receive if all earnings for the current reporting period were distributed. However, if the partnership agreement is silent or does not explicitly limit distributions to the general partner (with respect to the distribution rights of an embedded incentive distribution right) to available cash, then the master limited partnership would allocate undistributed earnings to the general partner (with respect to the distribution rights of an embedded incentive distribution right) utilizing the distribution waterfall for available cash specified in the partnership agreement.
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Any excess of distributions over earnings shall be allocated to the general partner and limited partners based on their respective sharing of losses specified in the partnership agreement for the period presented.
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A general partner may transfer net assets to a master limited partnership as part of a dropdown transaction that occurs after formation of the master limited partnership. If the master limited partnership accounts for the dropdown transaction under the Transactions Between Entities Under Common Control Subsections of Subtopic 805-50, in calculating the historical earnings per unit under the two-class method, the earnings (losses) of the transferred net assets before the date of the dropdown transaction should be allocated entirely to the general partner. In that circumstance, the previously reported earnings per unit of the limited partners for periods before the date of the dropdown transaction should not change as a result of the dropdown transaction.
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